Nick Smith returns to Cabinet

Nelson MP Nick Smith says he is delighted to be back in Cabinet and pleased with the new challenges he will face as Minister of Housing.

Prime Minister John Key announced today that Phil Heatley and Kate Wilkinson have been axed from Cabinet to make way for new minister Nikki Kaye and a redeemed Smith.

Smith resigned as ACC Minister in the wake of the Bronwyn Pullar ACC scandal and has been on the Government backbenches since last year.

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SHANE JONES: Former front bench MP.

"The housing issues are particularly pertinent for Nelson and New Zealand," Smith said. "I've always had a strong view that home ownership is an essential part of the New Zealand psyche and that has been eroded over the last 20-25 years as house prices have risen faster than people's incomes."

The challenge was to pick up on the comprehensive report of the Productivity Commission and deliver the reform and change that would make a long-term difference to New Zealanders' aspirations to get into their own homes.

Referring to the leaky homes issue, he said it was clear that "just cheap houses is not going to work".

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Former Labour Minister Kate Wilkinson.

"It's about how you make them more affordable while maintaining the quality and meeting the needs of the future. It's a big, complex issue."

He would study the Productivity Commission's report and seek the advice of officials before beginning the reform process.

Smith said he was more confident about his level of knowledge in the conservation area and today talked to the director-general about some briefing papers he wanted to "get into the detail of".

"Conservation is particularly special for New Zealand in that just because of our geological history we've got this huge number of species - everything from the kiwi and the kaka - that only exist here, for which we've got a special responsibility, and it's also economically important for the tourism industry."

He would try to bring a very pragmatic, balanced perspective and ensure the most conservation gains in a tight fiscal environment.

He said he had spoken to Key this morning and was heading to Wellington tonight. He would be sworn in on Thursday of next week.

Smith did not want to comment on the dumping of Phil Heatley and Kate Wilkinson from the Cabinet, other than to say that "politics is a tough business".

"The prime minister has made calls about refreshing the team. There's no question of the talent that [newly elevated MPs] Simon Bridges and Nikki Kaye will bring in the long-term rejuvenation of National."

WILKINSON WAS ALWAYS GOING TO BE DUMPED

Key said Heatley and Wilkinson had made a "great contribution" for four years, and while he had asked them to stand down, he hoped both would continue and stand as candidates in the 2014 election.

"It's my view we do need to refresh so I'm asking them to stay as team players as part of the National caucus but as backbenchers. Both of them have given me that commitment."

Wilkinson's replacement was not related to the fallout from Pike River, which forced her to stand down at Labour Minister.

"That was a reflection of the Government taking its failures seriously, and she did absolutely the right thing. But irrelevant of Pike River I still would have replaced her at the start of this year" as part of a Cabinet refresh.

Wilkinson was minister of conservation and food safetly, as well as associate minister of immigration. Heatley was minister of housing and energy resources.

Wilkinson said she was naturally disappointed to be demoted but supported Key. She was proud of her contribution to Cabinet over the past four years.

"I now intend on putting all my energy into continuing to serve the people of Waimakariri as their local MP."

The area had significant issues following the earthquakes, she said. Wilkinson declined to comment further.

NEW ROLES

Auckland Central MP Kaye will be minister for food safety, youth affairs and civil defence while Smith will pick up housing and conservation.

Kaye's additional appointment as Associate Education Minister was part of Key's plan to make sure children were being provided with the tools they would face in the world.

"That is about digital literacy, making sure we've got those computers, and technology, deeply embedded in our schools, whether it's more iPads, or the way that we communicate with each other... And I think Nikki is going to bring both that younger person, but also someone with deep interest in education to that portfolio".

Government whip Michael Woodhouse has also been appointed as a minister, outside of Cabinet, with responsibility for immigration and veterans affairs.

Minister Simon Bridges has been promoted into Cabinet and will take over the labour and energy and resources portfolios as well as associate transport.

David Carter has been named as the Government's nominee to become Speaker when Lockwood Smith leaves to take up his appointment as New Zealand High Commissioner to the United Kingdom.

Carter's primary industries portfolio will be picked up by Nathan Guy.

There had been no conversations about what jobs might be available to Carter after the election, Key said, amid questions that the new Speaker nominee took the job only reluctantly.

"Was he reluctant? I think the way I'd describe it more that he was happy to do anything that I wanted him to do," Key said.

When the conversations about the role began it was not a position Carter had ever considered before, but once it was "on the table" it was something he was happy to take on, Key said.

"I've got to say that was the same position Lockwood Smith was in when we put him in as Speaker".

NOVOPAY NEEDS FRESH EYES

Meanwhile, Jonathan Coleman and Amy Adams have also been promoted with their Cabinet rankings rising to 10 and 15 respectively.

The Novopay debacle also featured in Key's reshuffle plans.

Responsibility for fixing the beleaguered teacher pay system has been transferred to Economic Development Minister Steven Joyce.

To date this had been the role of Associate Education Minister Craig Foss, however he had been dumped and replaced with new minister Nikki Kaye.

Key said he shared teachers' and principals' concerns about problems with Novopay and wanted the issue sorted.

"A fresh set of eyes is needed and I have asked Economic Development Minister Steven Joyce to take on that responsibility."

Key said it may take some time to get the problems sorted.

"I can assure teachers that we want to get Novopay sorted as soon as possible.

Foss has instead picked up the Minister of Consumer Affairs role to go alongside his work as Commerce Minister.